Carbon capture and storage can compete in a low-carbon energy mix

Carbon capture and storage (CCS) technology can help fossil fuel power generation compete cost-effectively with other low-carbon forms of energy within the next decade, according to new research.

An interim report undertaken as a collaboration between the Department of Energy and Climate Change, the Crown Estate and industry, demonstrates that UK gas and coal power stations equipped with carbon capture, transport and storage can be cost competitive with other forms of low-carbon electricity generation such as nuclear and renewables.

The research, carried out by the Carbon Capture and Storage Cost Reduction Task Force, shows the sector will be able to generate electricity at a levelised cost approaching £100 per megawatt hour by the early 2020s, and at a cost significantly below £100 per megawatt hour soon after.

The task force believes that reductions in the cost of CCS electricity can be achieved in less than a decade through four key areas:

* Investment in large offshore CO2 storage clusters, supplying multiple onshore CO2 emitters and with investment in large, shared pipelines, with high usage

* Investment in large power stations with progressive improvements in CO2 capture technology capacity, which should be available in the early 2020s following the first couple of projects

* A reduction in the cost of project capital through a set of measures to reduce risk and improve investor confidence in the sector

The Task Force, chaired by Dr Jeff Chapman, Chief Executive of the Carbon Capture & Storage Association, was set up to advise Government and industry on ways of reducing the cost of CCS for the next wave of projects, that will be constructed after the current Department of Energy and Climate Change CCS Commercialisation Programme.

The aim of the group is to help CCS to become commercially operational by the early 2020s, which requires the initial projects to begin operation this decade.

Energy Secretary Ed Davey said: “The UK is rightly recognised as a world leader in the development of this crucial technology. The findings of this report show the great potential ahead for the industry in the UK.

“By bringing its costs down, CCS can be cost competitive with other low carbon technologies as early as the 2020s. Deployment at scale will bring investment and jobs, not just to the power sector but across the whole supply chain, including our offshore oil and gas industries.”

Rob Hastings, Director of Energy and Infrastructure at The Crown Estate said: “With many of the UK’s fossil fuel plants set to be decommissioned soon and with challenging EU targets for carbon reductions, its welcome news that CCS looks set to compete as a major player in the nation’s low carbon future.

“This report provides important evidence that CCS-equipped power generation could be cost competitive with other low carbon forms electricity by the early 2020s. As the owner of the storage rights on the continental shelf The Crown Estate looks forward to working with government and the industry to help realise the full potential of CCS in the UK.”